Implementation of Medicaid Managed Mental Health Care in Iowa: problems and solutions

Under the terms of a 1915(b) waiver, Iowa implemented a statewide carve-out program in 1995 for the management of mental health services for Medicaid recipients by contracting with a private for-profit corporation. In this commentary, the strategy used to develop the Medicaid managed care contract in Iowa is briefly summarized. Problems that were encountered in program implementation and regulatory attempts to address those issues are described. Suggestions for other states regarding the development, implementation, and oversight of contracts for managed care so that they might be able to deliver comprehensive mental health care services with acceptable standards of care quality are offered. By including appropriate contract specifications, providing mechanisms for oversight, and enforcing standards of care in Medicaid managed care contracts, many problems that occurred in Iowa may have been minimized or avoided. This experience can provide a valuable lesson for similar program initiatives in other states.